Columnist: Hybrid growth in the near-term will benefit ... lead-acid battery makers?
2010 Mercury Milan Hybrid - Click above for high-res image gallery
Even though demand for hybrid vehicles is expected to grow like mushrooms after a summer rain in the coming years, there's a big problem looming, says John Peterson, a writer for investment site Seeking Alpha. Peterson has crunched some numbers and done some reading and discovered that the ingredients for a potential hybrid production slowdown are coming together. Those ingredients include: lack of advanced battery production capacity, increasing demand but no increase in supply of some rare earth metals needed to make NiMH batteries, and a slight undercounting of hybrid vehicle demand. In short, not everyone who wants a hybrid will be able to get one, and this could benefit, get this, lead acid battery makers.
With massive amounts of li-ion packs still far away, Peterson, who discloses that he's invested in lead-acid battery makers, concludes that, "the bulk of the unit growth in the HEV markets will go to lead-acid battery manufacturers who will not need to make larger numbers of batteries, but will need to make higher quality batteries that are better suited to the performance requirements of micro hybrids." This "should lead to rapid and sustained revenue growth for all lead-acid battery producers," he writes. Once these higher-quality advanced lead acid batteries exist, it'll be a no-brainer for the conservative automakers to opt for the known over the unknown. For the long-term, other chemistries will certainly win out, but for the next few years, don't count out the old standbys.
Gallery: Review: 2010 Mercury Milan Hybrid
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[Source: Seeking Alpha]
Reader Comments (Page 1 of 1)
paulwesterberg 3:29PM (7/06/2009)
says Peterson, who discloses that he's invested in lead-acid battery makers.
He bought penny stocks and now hopes to dupe unsuspecting investors.
Pump and Dump, nothing to see here.
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paulwesterberg 4:15PM (7/06/2009)
Oh, by the way, I have some prime swampland in Florida and I was wondering if autobloggreen would allow me to post an article about what a great opportunity this is. There has never been a better time to start investing in my future!
Bip-D-Bo 4:23PM (7/06/2009)
No, he has some good points. He obviously made his investment choices for a reason. We do not have the ability to quickly produce enough lithium or even NiMH to keep up with this new high demand. Lithium will become the next oil. This is going to cause to some degree a shift in global power with its own consequences, for good or bad. For the short term, most people who buy hybrids will do so with little or no knowledge of what kind of system it is, mild, medium, lithium, lead, etc. These hybrids will have little green leaf logos on them which will allow the buyers to feel a little bit more self righteous. The car manufacturers will capitalize on our desire to look down on our earth killing, apocalypse ushering neighbors by making as many cars with little green logos as they can, and they will do it the cheapest way possible. Lead batteries, although far inferior, will probably be a popular choice.
win39 4:37PM (7/06/2009)
You can't completely discharge a lead-acid battery more than a few times without destroying it. It is completely inappropriate as a hybrid battery. It could never function even with electronics limiting its output as more than a very mild hybrid. The reason they work in ICE is that they are always kept topped up. Even under those ideal conditions they have to be replaced every three years or so.
I find it unbelievable someone thinks that a car manufacturer would even try to sell a hybrid that would require the change out of several hundred pounds of battery annually. They would end up in receivership.
Isn't lithium ion the hot new battery anyway about to replace nickel metal hybride?
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Bip-D-Bo 5:17PM (7/06/2009)
Lithium is the hot new battery and different lithium alloys are being explored to make it much better than it is. The problem is that it's not like electronics like phones or DVD players, where once it's developed, they can produce it in mass and get it into everyone's house within a year. The mining of lithium will take a long time. The good news is that once we get it out of the ground, we will be able to recycle used batteries. Because lithium is limited, plug-in hybrids are a far better choice than pure electrics because it more effectively rations lithium to many more people, bring much more electric power to our roads. Until we get enough lithium out of the ground, Another way around the problem will be to use inferior batteries such as NiMH and maybe even lead for milder hybrids.
David Martin 5:07PM (7/06/2009)
Among the 'interesting' things that Jon has done to arrive at his conclusion that his advanced lead acid batteries will outsell lithium and NiMH is to base his figures for total car sales on figures pre-slump!
That way he can 'demonstrate' that it might be difficult to meet demand.
He then ignores the huge investments in batteries - NiMH and Lithium being made by all the major players. Here are some recent examples:
http://www.greencarcongress.com/2009/07/hitachi-20090702.html#more
http://blogs.edmunds.com/greencaradvisor/2009/07/sanyo-says-it-sees-big-hike-in-battery-business-as-demand-grows-for-hybrid-cars.html
The projected lithium shortage ignores that there are a variety of battery technologies, some much more economical on lithium than others.
Here is the AESC, the supplier to Renault:
http://www.greencarcongress.com/2009/06/bebop-ze-20090629.html
3kg for a 250kg battery doesn't sound like heavy use.
At current (low) prices of around $8kg, we have available something like 14-17mn tonnes.
That does not sound like and imminent shortage!
Of course, if you are prepared to pay a little more you could always get your lithium from seawater for $22-32 Kg:
(I am unable to quote the reference for this, as there is a limit of 3 url's - googling will locate the information)
So using this almost limitless resource, the lithium might cost $66-96 for your car battery - assuming we never made any progress on reducing the cost from this early demo.
The notion that none of the major battery companies know what they are doing, but will be hammered by penny-stock start ups promoting advanced lead-acid rests on conflating the proven and cheap conventional lead-acid technology with advanced lead acid, which is neither.
It will cost you fairly similar amounts per kwh to order advanced lead-acid for use in your car which would need a vast amount of testing as it would to use NiMH, which is fully tested.
The lead-acid batteries are supposed to be used to assist stop-start configurations.
Well, none of the major car companies are apparently testing any such thing for use in their stop-start cars, whilst the list of those looking at NiMH or lithium is a roll-call of the industry.
I have hopes that advanced lead-acid will play some significant part in the battery industry, starting in less demanding roles than automative use and gradually being introduced as experience is gained with their very different qualities to conventional lead-acid.
The idea that they are going to play a big part in the car industry in the near future appears entirely without foundation.
Don't put your money into these penny stocks on the basis of those ideas.
For car batteries bet on the big players from Japan, Korea and China.
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Chris 6:32PM (7/06/2009)
The Seeking Alpha article isn't about hybrids, it is about stop start systems. They call them micro hybrids. Somebody has been green washing. The article isn't actually bad. There is good information about NiMh battery supplies and when Li-ion batteries will be come available in sufficient supplies.
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Noz 2:13AM (7/07/2009)
Come on....we all know battery corporations have hearts of gold and do all this for the goodness of the planet and no profit.
I mean...let's be real...production of batteries, recycling, waste, etc produce only roses and dandelions. It's the perfect solution to all our energy problems and no other energy currency should be used or researched. Let's stick to carbon based fuels and batteries since these industries and corporations making them aren't in it for the money.
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DasBoese 10:30AM (7/07/2009)
Very clever, Mister noz.
However, I sincerely hope you are aware that deriding a subject without presenting an alternative is in some circles frowned upon as inopportune, unsportsmanlike even!
So, pray tell, Sir, what is your superior alternative to batteries and hydrocarbon fuels that would, in your words "produce only roses and dandelions"?
Of course we don't know the answer already, but please, do spell it out for us.
Noz 2:09AM (7/08/2009)
Precisely my point. Now you know how you whiny battery freaks sound.
And that's why it's important to research all types of alternatives...regardless of what most armchair geniuses around here think.
Ricknplano 9:12AM (7/07/2009)
John's articles are well researched and he discloses his stock ownership. He is not talking about conventional lead acid batteries (LAB) but instead new designs being produced by CSIRO, the Australian equivalent of our Sandia Labs or Argonne Labs, Firefly Energy, a startup from Caterpillar Corporation, and Axion, a small LAB manufacturer who has spent $50 million in research over 8 plus years to develop a battery/supercapacitor combination. These new LAB designs are hugely superior to the battery in your car today. They cost about 1/3 to 1/2 the price of lithium for equivalent capacity and life cycles. They accept a charge at a similar rate to lithium so the regenerative braking works fine with them. CSIRO ran a Honda Civic hybird with their batteries in place of the factory batteries for a 100,000 mile test in Britain to prove the efficacy in hybrid vehicle use.
The downside of advanced design LAB is that they are still too heavy for a full electirc vehicle or PHEV will need the lower weight and smaller size of lithium, which John readily admits. He suggests the new design LAB is suited for Prius of Honda Insight style hybrids only, where the weight and size disadvantage of LAB is offset by the significant cost advantage.
The manufacturers who have signed production agreements for the new LAB designs are Furakawa, East Penn and Exide, three of the largest battery manufacturers in the world. So while the car companies are excited about lithium, the guys who actually make the most batteries think there is clearly a place for the new advanced design LAB.
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Ricknplano 3:38PM (7/07/2009)
Paulwesterberg,
Furukawa had sales last year of over $4 billion (U.S.) with over 4,000 employees, East Penn is private but has the largest battery manufacturing facility in the world (490 acres and over 2 million SF under roof) located in Pennsylvania and CSIRO is the largest research facility in Australia. Exide had $3.3 billion in sales last year and operates in 80 countries. All these companies are working on or have licensed the rights to manufacture advanced lead acid batteries. These are not penny stocks.
Win39,
The original EV1 used lead acid batteries. Granted they were not great, but the point is LAB can be used in this environment. The new designs are just really good by comparison.
David Martin,
You have some good points. There is no doubt lithium is an abundant metal. It is also hard to get at affordable prices. Even at current prices the average lithium battery with comparable capacity to these new LAB designs is significantly more expensive. So having abundant potential sources and getting more lithium at higher cost is not the point, the point is that lithium is already too expensive and not likely to get cheaper from here. It is irrelvant how much is out there if it is not feasible to mine it given available alternatives with similar capacity but lower costs.
I think and hope there will be new capacitor/battery configurations using NiMH or lithium sulfur or some other breakthrough that will rival the designs being used for the LAB's that Mr. Peterson is referencing, but for the moment these new LAB designs are likely to grab a certain share of the market that wants and can operate with a low cost, albeit slightly heavier and larger, solution.
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Matthew 9:37AM (7/08/2009)
Maybe advanced lead acid batteries will see significant use in applications where performance and handling is not so important. Taxis, buses, trucks etcetera.
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